Number of open credit card accounts near 3-year high
The amount of open credit card accounts is at a level not seen in more than two-and-a-half years, Equifax said in a recent report.
According to Equifax’s August National Consumer Credit Trends Report, more than 175 million open retail credit card accounts existed in July. This is the highest mark in 31 months.
Credit card limits have also risen. Over the first five months of 2012, credit card limits hit $25.1 billion, which is a 16 percent increase from the same time period in 2011.
“The economic recovery is increasing both demand for new credit cards and the supply of credit,” said Equifax Chief Economist Amy Crews Cutts.
Cutts continued: “However, while consumers are seeking new credit card accounts, they are not increasing their use of that newly available credit as fast. Utilization rates of card limits continue to fall, and, additionally, we are seeing increasing payment ratios at the same time.”
According to Equifax, credit card delinquency rates fell almost 15 percent in July 2012 when compared to July 2011.
In addition, write-off dollar rates dropped to a 56-month low, which represents further evidence of more responsible payment activity from credit card users.
Subprime borrowers have been more likely to obtain new credit, as well. In May 2012, subprime lending increased almost 12 percent when compared to recession-low 2010 levels.
Loosening of credit standards by banks and issuers can help to put choice back in consumers’ hands, allowing them to compare credit cards and find a card that best suits their individual needs.
Posted in: Consumer Credit Cards